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Coronavirus & Alimony: Is there a Substantial Change in Circumstances?

By Snyder Sarno D'Aniello Maceri & da Costa LLC on April 24, 2020


The unprecedented COVID-19 (coronavirus) pandemic has sent our economy into a nosedive – along with-it millions losing their jobs or furloughed as a result.  Most businesses are at a virtual standstill and making difficult financial decisions about whether to retain their employees.  New Jersey alone has reported more than 718,000 people have lost their jobs since mid-March when stay-at-home orders and social distancing guidelines took effect.  

In the midst of this health and financial crisis, many divorced or separated obligors of alimony are asking themselves, “why should I have to continue paying alimony if I have no income or when there exists so much uncertainty about the future?” The question is perfectly reasonable and is increasingly pertinent as the number of alimony orders and agreements not being met has skyrocketed.    

Proving a Substantial Change in Circumstances

Historically, modification of alimony is dependent on the obligor’s ability to pay (i.e. income).  The seminal New Jersey case, Lepis v. Lepis, provides that an alimony obligor seeking to modify his or her obligation must demonstrate that a change in circumstances has substantially affected the ability to support himself or herself.  New Jersey case law generally rejects applications for modification of alimony based on circumstances that are merely “temporary” or that are anticipated but have yet to occur. Lepis v. Lepis, 83 N.J. 139 (1980).     

The New Jersey alimony statute, N.J.S.A. 2A:34-23, distinguishes between “non-self-employed” (i.e. employee) and “self-employed” (i.e. business owner) parties with respect to the period of time that must pass from the onset of a change in circumstances in order to seek modification of alimony.  For a non-self-employed party, he or she must wait 90 days from loss of employment or inability to attain employment at prior income levels to file an application for modification.  While the 90-day window may seem daunting at a time like this, a court nonetheless has the discretion to apply the relief retroactively to the date of loss of employment. 

Once a non-self-employed party meets the 90-day threshold, a court then considers whether the party seeking modification of alimony has demonstrated a change in circumstances by analysis of the following factors:   

  1. The reasons for any loss of income;

  2. Under circumstances where there has been a loss of employment, the obligor's documented efforts to obtain replacement employment or to pursue an alternative occupation;

  3. Under circumstances where there has been a loss of employment, whether the obligor is making a good faith effort to find remunerative employment at any level and in any field;

  4. The income of the obligee; the obligee's circumstances; and the obligee's reasonable efforts to obtain employment in view of those circumstances and existing opportunities;

  5. The impact of the parties' health on their ability to obtain employment;

  6. Any severance compensation or award made in connection with any loss of employment;

  7. Any changes in the respective financial circumstances of the parties that have occurred since the date of the order from which modification is sought;

  8. The reasons for any change in either party's financial circumstances since the date of the order from which modification is sought, including, but not limited to, assessment of the extent to which either party's financial circumstances at the time of the application are attributable to enhanced earnings or financial benefits received from any source since the date of the order;

  9. Whether a temporary remedy should be fashioned to provide adjustment of the support award from which modification is sought, and the terms of any such adjustment, pending continuing employment investigations by the unemployed spouse or partner; and

  10. Any other factor the court deems relevant to fairly and equitably decide the application.

The alimony statute provides for a different consideration when a “self-employed” party seeks modification of alimony based on an involuntary reduction in income.  In determining whether a change in circumstances exists, a court must analyze and compare the “economic and non-economic benefits a party receives from the business [now]… to those that were in existence at the time of the entry of the order” establishing alimony.  N.J.S.A. 2A:34-23(l).  This analysis generally requires a detailed review of the cashflow of the business “now” versus “then.”  Notably, there is no requirement that a “self-employed” party must wait 90 days before filing an application for modification.  

Proactive Steps You Can Take Now

As disheartening as it may be to lose your job, especially due to a pandemic that may have affected you in other ways such as your health, it is important to immediately take proactive steps.  In order to most effectively make your case for a substantial change in circumstances, you should: 

  1. Inform: Let your ex-spouse know of your loss of employment in writing.  This will enable the obligee to appreciate that your ability to pay has been affected and, in turn, allow him or her to adjust accordingly with the expectation that payments may not be met.  

  2. Actively seek employment: As discussed above, one factor a court considers for a non-self-employed obligor is his or her “documented efforts to obtain replacement employment or to pursue an alternative occupation.”  While it is understandable that many businesses are not hiring right now, it is nonetheless important to actively seek comparable employment.  This will show good faith on your part and a willingness to continue meeting your financial obligations to your ex-spouse.    

  3. Document:  It is crucial to document your efforts to obtain comparable employment so that your attorney can most effectively argue on your behalf.

If you are unable to meet your alimony obligation due to loss of employment as a result of the coronavirus pandemic, please contact the skilled matrimonial attorneys at Snyder Sarno D’Aniello Maceri & da Costa LLC. Call us today at (973) 274-5200.   

 

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